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Power retail tariff to rise in 5 states : ICRA

New Delhi, Feb 25 IANS | 1 year ago

Power retail tariff rates will rise in Gujarat, Haryana, Maharashtra, Punjab and Rajasthan, ratings agency ICRA estimates after the central regulator last week allowed power companies to increase rates for power sold to discoms.

"The average consumer tariff rate charged by the utilities is expected to increase in the range of 0.4 percent to 1.8 percent (i.e. 3 to 10 paisa/unit) for supply from Coastal Gujarat Power Ltd. to utilities of aforesaid five states," ICRA said here Tuesday in a statement.

Coastal Gujarat Power is a subsidiary of Tata Power and operates the 4,000 MW Mundra ultra-mega power project (UMPP) in Gujarat.

The Central Electricity Regulatory Commission last week granted compensation orders for the two power projects of Adanis and Tatas both located at Mundra, to make up for the increase in cost of imported coal.

In 2011, Tata Power, along with Adani Power, petitioned the CERC for a tariff hike after the government in Indonesia hiked the price of coal.

"ICRA estimates that other imported coal based projects (aggregating capacity of about 7,000 MW which are under planning/implementation and having competitively bid based power purchase agreements with fuel price risk exposure) would also be benefitted," it said.

These tariff hikes would lead to increase in retail power pricing only if the state distribution companies decide to pay more for the power.

Welcoming the CERC move as a positive one for power generation, ICRA said state utilities could appeal against it.

"Utilities in state of Haryana have already appealed to the Appellate Tribunal of Electricity against CERC's earlier order in April 2013 for allowing compensatory framework. Utilities in Punjab have opposed tariff compensatory framework", ICRA said.